Bike Hub levy

BikeHub.co.uk is a joint initiative of the Bicycle Association and the Association of Cycle Traders via the Bike Hub levy scheme. The objective of Bike Hub is to generate funds from within the cycle industry to support the future of cycling in the UK.

Running since 2003, the Bike Hub levy is voluntary, paid by the majority of UK bike shops and suppliers. About £350,000 is raised each year with contributions supporting cycling participation projects across the UK. Currently, the Bike Hub fund supports British Cycling’s Go-Ride youth training programme, Sustrans’ Big Pedal event, and the Space4Cycling campaigns from London Cycling Campaign and CTC.

Other highlights include:

Longest running industry-wide levy ever in the UK.

Contribution and engagement by both suppliers and IBDs for over 7 years

Scheme probably the most successful in Europe and the USA/Canada (Bikes Belong of the US depends on manufacturers’ donations)

Annual income now running above £400,000 each year, with total contributions over £2 million to date

The scheme covers the whole of the United Kingdom

The Bike It project, seed-funded by Bike Hub in 2004, now has over 50 full-time officers working in over 600 schools each year

Bike Hub’s iPhone app started as a bike shop finder and journey planner, is now world’s first ‘cycle satnav’

The UK’s Bike Hub levy has been running for eleven years. It was created to help pay for Bike Week, Bikeforall.net (which is now BikeHub.co.uk) and to demonstrate that the industry could pull together in a self-help way. Thanks in part to this industry initiative, the UK Government increased its investment in cycling.

A previous industry levy was run from 1995 to 1999 in order to raise £1m in order for Sustrans to start drawing down £42.5m from the Millennium Commission via the Big Lottery Fund. This short-term levy was allowed to lapse but was resurrected in 2003 thanks to hard work by Phillip Darnton, the then president of the Bicycle Association of Great Britain (BAGB).

BAGB brought most suppliers on board, and the Association of Cycle Traders lobbied its retail members to join the scheme.

One of Bike Hub’s major success stories was Bike It, a scheme run by Sustrans to encourage more children to cycle to school. Bike Hub paid for the wages of Bike It’s first officers. In 2004 there were four officers, now there are 60 full-time officers working in over 600 schools each year.

Bike Hub has supported projects across the UK. It pledged £30,000 for two years to Cycling Scotland for the Scottish version of Bikeability child cycle training. As well as supporting on-the-ground projects, Bike Hub also funds digital projects such as BikeHub.co.uk and the Bike Hub bike shop finding and journey planning app. The second version of this app added a ‘cycle satnav’ feature with voice and vibration alerts: this was a world first.

The Bike Hub app started as an iPhone app and will soon be available as an Android app, too. Within days of launch the Bike Hub iPhone app was second in the navigation category on iTunes and has been featured on Macworld.co.uk, The Register, The Guardian, Treehugger.om and ZDNet.com.

PROJECTS SUPPORTED
The focus of the Bike Hub levy is “to safeguard the future of the cycle industry”. So, the largest contributions from Bike Hub are directed towards young people, and getting them to cycle, to try to halt the 40 year annual decline in trips by bike (37 percent in the 1950s : 1.5 percent in 2009). However, Bike Hub has also supported schemes for senior citizens and teenage girls.

National Bike Week was to get £25,000 a year in support of the Government contribution of £50,000. Bike It was to receive £250,000 a year, to be managed by Sustrans, a charity.

From 2006 onwards, Bike Hub’s contribution to Bike Week was increased to £30,000 a year because the contribution from Cycling England and the Department for Transport had increased to £75,000 per year. With such support, Bike Week was able to generate a great deal of publicity which helped it secure an outside sponsor. EDF Energy’s Team Green Britain invested an additional £200,000 in the 2010 event, with an expectation of continued sponsorship for a further two years.

Bike Hub’s support of Bike It has seen it grow to an organisation with 60 full-time officers, who work with over 600 schools. This is about 60,000 potential pupils who are influenced each year. Monitoring in six towns over three years has shown at least a doubling of regular cycle trips to school. In 2008/9 Bike Hub worked with Sustrans to extend the Bike It scheme to Wales, Northern Ireland, and then to Scotland, where DfT funding did not apply, to ensure that a National investment of levy funds was made. The Scottish scheme is called I-Bike.

In 2009, Bike Hub created the New Ideas Fund for smaller schemes. There was a minimum limit of £20,000 pa for any one scheme. A total budget of £100,000 pa was proposed. From some 20 submitted schemes, Bike Hub committee members selected three for funding in 2010 and 2011.

* The contributions made in 2008 include some payments accrued and deferred from 2007. These are estimated at c.£60,000.

Contributing companies generally remit their payments to the auditor during the three months following the quarter in question. Some small companies make remittances once or twice a year. The amount of levy raised for 2010 to date (1st/2nd Quarters) is £223,552 (inc. VAT).

The method of invoicing by distributors varies, with some adding 0.1 percent levy to each invoice; others invoice a specific levy contribution quarterly; some distributors pay 0.2 percent themselves on small invoices for administrative simplicity.

COMMITTEE
Between 2007/2010, a Bike Hub committee was established, and chaired by Phillip Darnton. The committee comprise four members of the BA Council and three members of the ACT Board.

In 2010, it was agreed after discussion that the BA Council would resume its original role of direction, and that new investment options would be reviewed annually with the ACT, as funds permitted.

LOGISTICS
Bike Hub is a voluntary contribution levy, comprising a charge of 0.1 percent on retailers’ invoices from their suppliers, matched with a further 0.1 percent paid by the suppliers themselves.

All remittances are made directly to an independent auditor, who reports income quarterly as a total figure; contribution amounts are not itemised by individual companies, and payments have been made on trust. The BA members who do contribute are known and listed, but the retailers who participate are not identifiable to the BA nor to the ACT.

Following a review in 2007, distributors who did not obtain 0.1 percent contribution from a retailer were not obliged to contribute 0.1 percent themselves for that amount. A regular list of contributors by quarter was provided by the auditor confidentially, and the auditor was required to draw attention to any irregular or unexpected levels of contribution (without identifying them).

Most BA members pay into the levy scheme, including Halfords.

Contributions to the fund are welcome from all retailers and suppliers of bicycles; it is not a pre-condition to be a member of the Bicycle Association.

GOING FORWARD
Following the new Government’s withdrawal of funding for cycling-specific projects, Bike Hub has agreed to support two long-standing schemes, at least until new funding arrangements can be worked out.

These are National Bike Week and Bike to School Week, and Cycle to Work Day, a new initiative.

The Government has withdrawn £75,000 per year funding from Bike Week, jeopardising the EDF Energy sponsorship of £200,000 per year.

Funding has also been withdrawn from Bike to School Week. £60,000 had originally been pledged for a major national cycle to school scheme, ‘The Big Pedal’.

Cycle to Work Day was to be a celebration of the Government’s Cycle to Work salary-sacrificing bike-buying scheme. Campaign groups were planning a national effort, focussed on a date in 2011, to promote cycling to work and to safeguarding the government’s present Cycle to Work scheme.

The estimated contributions from Bike Hub might be in the order of £35,000 for Bike Week; £30-£35,000 for The Big Pedal and £30,000 for Cycle to Work Day.

In order to ensure that Bike Hub funds are well distributed across the UK, the Bicycle Association was in discussion with Cycling Scotland and the Scottish Government about cycling training for young people in Scotland. The Scottish Government agreed to invest £295,000 in a Scotland-wide unified training programme based on the English National Cycle Training Standard. In order to manage and promote this, Bike Hub to contributed £30,000 for 2011 (and hopefully for 2012).